\section{Reinsurance - How PI Can Eliminate Risk and Lock In Profits}
\label{sec:Reinsurance-HowPICanEliminateRiskandLockInProfits}

$PI$ cannot adequately compensate smaller, less efficient insurers (risk assuming health care providers), but $PI$ can lock in profits and eliminate risk by passing its Claims Costs to more efficient insurers, $NHI$ and $B$. If $B$ assumes all $PI$'s policyholders' Claims Costs, $\sigma_{e_{B}}$ drops from $\sigma_{e_{10,000,000}}$ = 0.015811, to $\sigma_{e_{11,000,000}}$ = 0.015076. $NHI$'s  $\sigma_{e_{308,000,000}}$ = 0.002849 drops to $\sigma_{e_{309,000,000}}$ = 0.002844. $NHI$ and $B$ become larger, more efficient insurers by accepting $PI$'s risks, and can accept less than 85\% of $PI$'s Earned Premiums, eliminate $PI$'s risk, and exceed $PI$'s pre-transfer probabilities of earning profits of at least 5\%; or avoiding operating losses, on their entire portfolios.

\subsection{Profit Adjusted Premiums - PI Transfers Risks to Insurer B or NHI}
 \label{sec:ProfitAdjustedPremiums-PITransfersRiskstoInsurerBorNHI}

$B$'s new probability, $\Phi_{B}$(0.765076), of a PLRE less than 0.765076 (PLR + 1 * 0.015076) is 0.8413, $PI$'s probability of profits of at least 5\%. $B$ can exceed $PI$'s probability of earning 5\% profits on its portfolio, if $PI$ pays $B$ 81.51\% (100\% * (0.765076 + 0.05000)) of its Earned Premiums. $PI$'s profits are guaranteed at 3.49\%. $\Phi_{NHI}$(0.752844), $NHI$'s probability of a PLRE less than 0.752844 (PLR + 1 * $\sigma_{e_{309,000,000}}$), is 0.8413, so $NHI$ can exceed $PI$'s probability of earning 5\% profits on its portfolio, if $PI$ pays $NHI$ 80.28\% (0.752844 + 0.05000) of its Earned Premiums, and $PI$ earns guaranteed profits of 4.72\%.

\subsection{Loss and Risk Adjusted Premiums - PI Transfers Risks to Insurer B and NHI}
 \label{sec:LossandRiskAdjustedPremiumsThatWorkTransferstoInsurerBandNHI}

$PI$'s situation improves if $NHI$ and $B$ have more modest goals: Avoiding losses with $PI$'s pre-transfer probability. $B$'s probability, $\Phi_{NHI}$(0.780152), of a PLRE less than 0.780152 (PLR + 2 * $\sigma_{e_{11,000,000}}$), is 0.9772, $PI$'s probability of avoiding operating losses. If $PI$ pays $B$ 78.02\% of its Earned Premiums, $B$ exceeds $PI$'s probability of avoiding operating Losses on its entire portfolio, and $PI$'s guaranteed profits are 6.98\%. $NHI$'s probability, $\Phi_{NHI}$(0.755688), of a PLRE less than PLR + 2 * $\sigma_{e_{309,000,000}}$, is 0.9772. $PI$ can pay $NHI$ 75.57\% of its Earned Premiums and lock in profits of 9.43\%, while $NHI$'s probability of avoiding losses on its entire portfolio exceeds $PI$'s pre-transfer probability.

$B$ and $NHI$ would want more of $PI$'s profits, but no insurer (risk assuming health care provider) smaller, post-transfer, than $PI$, can assume $PI$'s Claims Costs for less than $NHI$ or $B$. Previously clinically efficient providers, accepting capitation from $PI$, become inefficient insurers and must cut patient care (See Section~\ref{sec:InsurerRiskandMaximumSustainableBenefits}), or face financial ruin. 

Even very generous reinsurance companies will not accept insurance risks, at affordable fees, from capitated providers. Reinsurers do not want the risks of high Claims Costs that $PI$ rejects when it starts paying providers through capitation. $PI$'s benefits are clearly a result of forcing providers, at arm's length, to cut medically necessary and appropriate care for their patients. Low cost, provider reinsurance would reduce, or eliminate, the cuts in needed care that capitation compels, eliminating the only advantage of capitation.
